THIS AGREEMENT (hereinafter referred to as the "Agreement") is made as of
the 16th day of April, 1996, by and between THE INTRAC GROUP, with offices
located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred to
as "Intrac") and US HOME AND GARDEN, with offices located at 000 Xxxxxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
WHEREAS, US Home and Garden desires to sell certain products to Intrac, and
Intrac desires to purchase such products from US Home and Garden, in exchange
for trade credits issued by Intrac, which credits may be utilized by US Home and
Garden in connection with the purchase of advertising media, services and/or
merchandise from and/or through Intrac, subject to and in accordance with the
terms and conditions set forth hereinafter.
NOW, THEREFORE, for and in consideration of the mutual promises hereinafter
contained, the parties hereto agree as follows:
1. PRODUCTS. US Home and Garden hereby sells the products more fully
described in Exhibit A attached hereto and made a part hereof (hereinafter
referred to as the "Products") to Intrac, for use and/or resale by Intrac, for
the consideration set forth in Paragraph 2 hereof, the sufficiency of which is
hereby conclusively acknowledged and established.
2. CONSIDERATION.
(a) Upon Intrac's receipt of a signed proof of delivery attesting to
the fact that the Products have been delivered pursuant to Paragraph 4 hereof,
Intrac shall issue trade credits on its books and records (hereinafter referred
to as "Credits"), in favor of US Home and Garden, in the full amount of the
price for such Products, as set forth in Exhibit A, which Credits may be used by
US Home and Garden solely in connection with the purchase of advertising media,
merchandise and/or services from Intrac pursuant to all of the terms and subject
to all of the conditions set forth hereinafter.
(b) Within thirty (30) days following Intrac's resale of the Products
and receipt of the proceeds from its resale of the Products, Intrac will remit
to US Home and Garden an amount equal to forty-two (42%) percent of the net cash
proceeds of sale actually realized by Intrac, for which the amount of the cash
received by US Home and Garden shall equally and proportionately reduce the
dollar amount of the Credits as established by the purchase of the inventory as
listed on Exhibit A.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) US Home and Garden warrants and represents that:
(i) the Products are sold as is, of good and merchantable
quality, is in salable condition and in unopened factory sealed boxes, cartons
and/or containers;
(ii) the Products, and all packaging, meet and conform to US Home
and Garden's specifications, industry standards and the requirements of any
regulatory body that may have jurisdiction over the manufacture, distribution,
sale and/or packaging of the Products;
(iii) it has good and marketable title to the Products;
(iv) the transfer provided for herein is rightful; and
(v) the Products shall be delivered to Intrac or its assignee(s)
free from any security interest or other lien or encumbrance or any claim of any
third party, whatsoever, including but not limited to any claim of infringement
or the like.
(b) US Home and Garden agrees to indemnify, defend and hold Intrac and
its successors and assignees harmless from and against any warranty and/or
product liability claim relating to the Products and/or any other claim, action
or cause of action arising or resulting from the breach of any term, covenant,
representation or warranty of or by US Home and Garden contained herein and/or
any loss up to the price schedule as detailed on Exhibit A, expense, damage,
liability or obligation(including reasonable attorney's fees) suffered,
sustained or incurred by Intrac or its successors and assignees in connection
therewith.
(c) US Home and Garden shall deliver to Intrac a Certificate of
Product Liability Insurance, naming Intrac and its successors and assigns as
party insured, at no cost to Intrac.
(d) The Products shall be covered by, and US Home and Garden agrees to
honor, US Home and Garden's standard limited consumer warranty for the Products
in the form of replacement product on a unit-by-unit basis.
4. SHIPMENT AND DELIVERY OF PRODUCTS; RISK OF LOSS.
(a) US Home and Garden shall, at its sole cost and expense, deliver
the Products in full truckload quantity, to or on behalf of Intrac, pursuant to
and within ten (10) days
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following US Home and Garden's receipt of written shipping instructions from
Intrac, to the location(s) designated by Intrac (hereinafter referred to as the
"Designated Location(s)"), F.O.B. destination, full freight allowed within the
Continental U.S.A.
(b) US Home and Garden shall also, at its sole cost and expense,
warehouse and insure the Products prior to delivery to the Designated
Location(s) and risk of loss shall remain with US Home and Garden until delivery
of the Products to the Designated Location(s). As of June 20, 1996, Intrac shall
be solely responsible for all warehousing and insuring the Products with the
exception of outcharges that are to remain the responsibility of US Home and
Garden.
(c) After each shipment, US Home and Garden will provide Intrac with
written confirmation that the Products have been shipped, the date of shipment,
the number of units shipped and the destination.
(d) After each delivery, US Home and Garden shall provide Intrac with
a signed proof of delivery attesting to the fact that the Products have been
delivered, the date of delivery, the number of units delivered and the place of
delivery.
5. UTILIZATION OF THE TRADE CREDITS.
(a) US Home and Garden shall utilize the Credits as follows:
(i) US Home and Garden shall advise Intrac, at least thirty (30)
days prior to the first airing date, and at least ninety (90) days prior to the
first posting date and/or publication date, of (A) the specifications, in terms
of demographic and geographic market weights ("gross rating points"), by
standard dayparts, of all of US Home and Garden's requirements for spot
television air time, network television air time, spot cable air time, network
cable air time, spot radio air time, and/or network radio air time, and/or (B)
all of US Home and Garden's print requirements for which US Home and Garden
qualifies with the publication(s) on a barter basis, and/or (C) all of US Home
and Garden's requirements for out-of-home media, and Intrac will provide the
same to US Home and Garden, subject to availability, upon prepayment by US Home
and Garden to Intrac, in cash, within ten (10) days following US Home and
Garden's receipt of Intrac's invoice(s), of the amount of Intrac's price
therefor; and
(ii) Intrac shall charge against the outstanding balance of US
Home and Garden's Credits the difference between the amount of Intrac's price
for such advertising media and the amount of the costs or rates for such media
determined by reference to (1) Spot Quotations and Data ("SQAD") in the case of
spot television air time, (2) Nielsen
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Audience Demographics ("NAD") in the case of network television air time, (3)
Marketer's Guide to Media ("MGM") in the case of network cable air time, spot
cable air time, network radio air time and/or spot radio air time, (4) Standard
Rate and Data Source ("SRDS") in the case of magazine space, (5) Buyer's Guide
to Outdoor Advertising ("BGOA") in the case of out-of-home media, and/or (6)
other recognized syndicated industry cost sources, as applicable.
(iii) For purposes of Paragraph 5(a)(ii) hereof, Intrac shall
determine and advise US Home and Garden as to the applicable rates for the
advertising requested as determined by reference to the most current published
edition of SQAD, NAD, MGM, SRDS and/or BGOA, and each shall be calculated in
accordance with the applicable demographic and geographic market, calendar
quarter and daypart, as per the applicable rate source in effect at the time
Intrac places the order for the advertising media, without any deduction or
discount for commission or otherwise and the discount or premium for any
commercial length other than thirty (30) seconds, in the case of spot television
air time, network television air time, spot cable air time, network cable air
time, and network radio air time, or sixty (60) seconds, in the case of spot
radio air time, and the cost-per- rating point for any demographic market or
daypart other than those specifically included in the rate sources referred to
above, will be as mutually agreed upon by Intrac and US Home and Garden and/or
its designated advertising agency (hereinafter referred to as "Agency").
(iv) US Home and Garden will be responsible for all "production"
and "traffic" functions with respect to all advertising media purchased by US
Home and Garden from Intrac hereunder.
(v) Before contracting for any advertising media on US Home and
Garden's behalf, Intrac shall provide US Home and Garden and/or Agency with a
written broadcast order confirmation for such media, which must be acknowledged
by US Home and Garden and/or Agency and returned to Intrac.
(vi) If any of US Home and Garden's broadcast advertisements are
pre-empted, Intrac will provide US Home and Garden with substitute advertising
media (a "makegood") of at least comparable value. All makegoods will, if
possible, be provided within fifteen (15) days after the last telecast of the
flight.
(b) US Home and Garden may also, at its option, advise Intrac of any
other services or merchandise (including but not limited to those listed in the
attached Exhibit B) which US Home and Garden desires to purchase and the price
at which the same are available to US Home and Garden. Intrac will advise US
Home and Garden as to whether Intrac can obtain and/or provide
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such services and/or merchandise and, if so, the price at which Intrac will
provide such services and/or merchandise to US Home and Garden. Intrac and US
Home and Garden shall mutually agree on the cash and credit utilization factors
for such services and/or merchandise, and Intrac shall purchase the same for
and/or provide the same to US Home and Garden, upon prepayment by US Home and
Garden to Intrac, in cash, within ten (10) days following US Home and Garden's
receipt of Intrac's invoice, of the amount of Intrac's price therefor. In
addition to the foregoing cash payment, Intrac shall also charge against the
outstanding balance of US Home and Garden's Credits the difference between (x)
the amount of Intrac's price for such services and/or merchandise and (y) the
price at which the said services and/or merchandise were otherwise available to
US Home and Garden.
(c) The Credits may only be utilized pursuant to Paragraphs 5(a)
and/or 5(b) hereof and, notwithstanding anything contained herein, in no event
may the Credits be returned to Intrac for cash or shall US Home and Garden be
entitled to receive cash from Intrac for any reason, whatsoever.
6. REPORTS. At US Home and Garden's request, Intrac shall provide US Home
and Garden and/or Agency with a written report setting forth the total amount of
Credits utilized by US Home and Garden to date and the amount of Credits then
outstanding on Intrac's books and records in US Home and Garden's favor.
7. TERM. US Home and Garden's Credits, and Intrac's obligations to US Home
and Garden hereunder, will expire finally and fully and terminate thirty-six
(36) months from the date of this Agreement or at such earlier time as US Home
and Garden's Credits shall have been fully exhausted by charges pursuant to
Paragraphs 5(a) and/or 5(b) hereof; provided, however, that to the extent that
any advertising media requested by US Home and Garden and confirmed by Intrac is
pre-empted during the final three (3) months of said period, US Home and Garden
shall have an additional three (3) months within which to request makeup media.
8. FORCE MAJEURE. Should Intrac be unable to provide advertising media,
merchandise and/or services to US Home and Garden hereunder by reason of acts of
God, labor or material shortages, equipment breakdown, air or ground delays or
other traffic problems, fires, explosions, breakdown of facilities, strikes,
civil authority or any other cause which is beyond the control of Intrac
(hereinafter referred to as "Force Majeure"), Intrac shall give prompt notice of
such Force Majeure to US Home and Garden, and the obligations of Intrac
hereunder shall be suspended, and the term of this Agreement shall be extended,
to the extent made necessary by such Force Majeure.
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9. MEDIATION/ARBITRATION. Unless the parties mutually agree otherwise, all
claims or disputes between Intrac and US Home and Garden arising out of, or in
any way relating to, this Agreement, or the interpretation, construction or
breach hereof or thereof, shall be submitted first, within thirty (30) days
after the claim or dispute has arisen, to mediation, in the City of New York,
under the auspices of the American Arbitration Association ("AAA"), in
accordance with AAA's Commercial Mediation Rules then in effect. In the event of
the termination of the mediation proceedings, either as the result of the
written declaration of the mediator(s) appointed by AAA to the effect that
further efforts at mediation are no longer worthwhile or as a result of the
written declaration of the parties, all such claims or disputes shall be
submitted to arbitration, within thirty (30) days thereafter, by a panel of
three (3) arbitrators, in the City of New York, under the auspices of AAA, in
accordance with AAA's Commercial Arbitration Rules then in effect. The award
rendered by the arbitrators appointed by AAA shall be final, and judgment may be
entered upon the arbitrators' award in accordance with applicable law in any
court of competent jurisdiction. The agreements to mediate and arbitrate set
forth herein may be specifically enforced by either party.
10. BINDING EFFECT; ASSIGNABILITY. All, or any part, of US Home and
Garden's Credits may, from time to time, be assigned by US Home and Garden to
any subsidiary or affiliate of US Home and Garden; provided, however, that any
assignment of US Home and Garden's Credits to other than a subsidiary or
affiliate of US Home and Garden shall require Intrac's prior written consent,
which may be given or withheld in Intrac's sole and absolute discretion. Except
as otherwise provided herein, this agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
11. NOTICE. All communications provided for herein shall be in writing and
shall be delivered in person or by certified mail, return receipt requested, or
by overnight courier service, as follows: to Intrac at 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention: Xxxxxx Xxxxxxxxx, Chairman; and to US Home and
Garden at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xx. Xxxxxxx Xxxxxxx.
12. PARAGRAPH HEADINGS. The paragraph headings contained in this Agreement
are for convenience and reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to conflict of laws principles.
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14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall be deemed tro be one and the same instrument.
15. SEVERABILITY. In case any clause or provision in this Agreement shall
be deemed to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining clauses and provisions hereof shall not in any
way be affected or impaired thereby.
16. INTERPRETATION. This Agreement shall be interpreted as having been
fully negotiated and drafted jointly by both parties, and shall not be more
strictly construed against either party.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement by
and between the parties hereto with respect to the transactions contemplated
hereby, supersedes all prior oral and/or written understandings and agreements
relating thereto. Neither party nor any of its agents has made any
representations to the other which the parties intend to have any force or
effect, except as specifically set forth herein, and neither party, in executing
or performing this Agreement, is relying upon any statement, covenant,
representation or information, of any nature, whatsoever, to whomsoever made or
given, directly or indirectly, verbally or in writing, by any person or entity,
except as specificaLly set forth herein. This Agreement may not be modified or
changed, in any way, except in writing signed by both of the parties hereto.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have each caused this Agreement to be duly executed as of the date first
above written.
THE INTRAC GROUP US HOME AND GARDEN
By:/s/ Xxxx Xxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------- ------------------------------
Title: President Title: COO
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Date: 4/16/96 Date: 4/16/96
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EXHIBIT A
PRODUCTS
DESCRIPTION QUANTITY
Power Gardeners 70,000, Units (estimate)
Manufacturing Rights to the
Power Xxxxxxx
Manufacturing Molds to the
Power Xxxxxxx
TOTAL VALUE $1,600,000
EXHIBIT B
PRODUCTS/SERVICES/MERCHANDISE
AVAILABLE WITH TRADE CREDIT UTILIZATION
---------------------------------------
Estimated Range of
Trade Credit Utilization
------------------------
o Promotional & Marketing Programs 20-50%
o Merchandise Incentive Programs 20-50%
o Rack, Counter, and Point-of-Purchase
Displays 5-30%
o Telecommunications Services 5-30%
o Group Air Travel & Hotel Accommodations 5-25%
o Printing & Graphic Services 5-15%
o Transportation/Freight, Air Cargo,
Household/Corporate Moves 5-10%
o Computer Hardware and Software 10-20%
o Travel Incentive Cruises 10-40%
o Full range of Insurance Services 10-25%
o Public Relations Services 10-35%
o Automotive/Fleet Requirements 5-20%
o Furniture/Furniture Management Services 10-25%
